The technological advance in CRM and the impact on customer loyalty: a comparative study between Irish and German consumers

Abstract

This work investigates the use and effects of Customer Relationship Management, and attempts to posit how the technology may develop in the future, while also presenting recommendations regarding how companies may wish to adapt their policy in order to make best use of the technology. The paper begins by looking at the issues of CRM and data protection, as well as surveillance culture. This is looked at from the perspectives of both consumers and organisations, and a wide background framework is presented. The second section of the work explains why the topic was chosen, and presents the manner in which the focus of the research was chosen - the author’s experience and access to consumer markets in both Germany and Ireland, and interest in loyalty card schemes which are used in both countries. Overall aims are presented, and a thorough literature review is also undertaken, in order to make sure the work is fully contextualised. A full explanation of CRM technology, as well as a description of legislation and practice in the two countries is also given. There is then a thorough explanation of the research methods chosen, and the manner in which they were deemed to be appropriate for this particular project is also discusses. Ethical issues are discusses, and the full method chosen for the research is put forward and justified. Results are then presented in the following section of the work, and the results are analysed and illustrate trends within both countries, also discuss differences between the two. The limitations of the research and possible flaws are discusses, conclusions are presented, and recommendations are drawn from these. The findings of this thesis essentially illustrate that Irish and German consumers of all classes and ages think more critically than would have been expected when it comes to the issue of data protection. This critical attitude concerns the private and public sectors in equal measure. The thesis further discovered that the most significant disparities lie between how different groups of people think and act. This gap is large and as there are no obvious disadvantages, they ignore the technological progress and the potential negative effect further developments that such technology might have. What is more, it has been shown that there are several features which distinguish the populations of Ireland and Gennany. Most notably, the fear of state surveillance is more deeply rooted in Germany than in Ireland. In relation to loyalty card behaviour and how German people deal practically with matters of data protection, there is no significant difference between behaviour of consumers in both countries. In other words German respondents, who have a different and a stricter attitude to the issue of data protection, tend to act in a less critical way. At the moment, bonus programs are widely accepted in both countries because of the strong desire for the small benefits they offer, which overrides people’s concern for the protection of their data. As long as companies who offer loyalty cards deal responsibly and transparently with the issue of data protection, consumers will benefit in the long run from bonus programmes. It can therefore be argued that CRM is currently not having a discernible effect on customers’ behaviour.